Economic Overview & Business Opportunities – Republic of Kosovo
The Republic of Kosovo is a landlocked country that is bordering Serbia to the north and east, Macedonia to the south, Albania to the west, and Montenegro to the northwest. As the smallest country in the Balkans (note: the Balkans, also known as the Balkan Peninsula, is a region consists of Croatia, Bosnia and Herzegovina, Slovenia, Serbia, Montenegro, Kosovo, Macedonia, Romania, Bulgaria, Albania, Greece, and the European part of Turkey), Kosovo has a population close to 1.82 million. Kosovo’s location at the heart of the Balkans has put itself as the connecting point between the South-Eastern European countries. In other words, the country’s strategic location is important for the regional economic growth where it provides easy access to the growing market in Balkans and Central Europe.
Overview of Kosovo’s Economy
Kosovo’s economy is part of the region’s economic integrations that provide plenty of opportunities for market expansion. Gained independence in 2008, Kosovo has a transition economy that is new and dynamic. Kosovo joined the World Bank and International Monetary Fund in June 2009. Since independence, its economy has outperformed other countries in the region with economic expansion every year. Today, Kosovo is the world’s 51st freest economy in the 2019 Index with the economic freedom score of 67.0. Though its overall score is below the regional average, the overall score is above the world average. According to the latest World Bank annual ratings, Kosovo is now ranked 44 out of 190 economies in the ease of doing business. The country’s attractive tax regime, natural resources, and a vibrant business environment are the impetus behind the fast-growing economy.
Why Do Business in Kosovo
Kosovo’s government welcomes foreign investors to do business in the country. The foreign-investor-friendly policy was underscored by the stable macroeconomic environment, good financial system, sound fiscal policy, as well as low tax rates in the region. The supportive business environment has given it an edge in the international market as one of the investment spots.
1. Strategic geographical location:
Located at the heart of the Balkans, Kosovo strategically connects the countries of the region and the rest of Europe and providing access to the main ports of the Adriatic and Black seas.
2. Quick access to huge markets in the region:
Kosovo’s liberal regime in a free trade market and its good trade relationships with many countries are the impetus behind this. Investors in Kosovo could have free access to the EU market under the EU Autonomous Trade Preferences (ATP). Besides, Kosovo’s free trade agreement with Central European countries, CEFTA, has given Kosovo access to the duty-free market of more than 520 million consumers.
3. Sound Legislation:
The legal system of Kosovo is compatible with EU legislation while the same legal regime for both domestic and foreign investment maintains. Kosovo adopted the International Standards for Financial Reporting and offers “a national treatment” for foreign investors.
4. Attractive tax system:
The direct and simple tax system in Kosovo is another reason that attracts foreign investors. Kosovo has one of the lowest rates for corporation tax in the region at 10% while customs duties on imports, in general, are 10%. There are no import duties on capital goods and agricultural production means in Kosovo.
To conclude, Kosovo gained its traction as an important location for business and investment in the region due to the multiplicity of advantages: a highly educated workforce, rich in natural resources, state-of-art infrastructure, a good fiscal policy, strong banking system and the low tax regime. If you want to expand your business in the Balkans, Kosovo could be one of the preferred countries on your list.
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